Category Archives: Financial

Why You Must Have a Business Plan

It’s more than a tool for getting funding. Think of it as the road map to your business’s future.
Stever Robbins

Recently someone asked me why they needed a business plan if they were getting all the funding they needed from friends and relatives. It sounded to me as if they were thinking of a business plan as just a fund-raising tool. In fact, a business plan is much more than that: It’s a tool for understanding how your business is put together. You can use it to monitor progress, hold yourself accountable and control the business’s fate. And of course, it’s a sales and recruiting tool for courting key employees or future investors.

Writing out your business plan forces you to review everything at once: your value proposition, marketing assumptions, operations plan, financial plan and staffing plan. You’ll end up spotting connections you otherwise would have missed. For example, if your marketing plan projects 10,000 customers by year two and your staffing plan provides for two salespeople, that forces you to ask: How can two salespeople generate 10,000 customers? The answer might lead you to conclude that forming partnerships, targeting distributors and concentrating on bulk sales to large companies would be your best tactics.

As part of your operational plan, you’ll lay out major marketing and operational milestones. When you’re the founder, the only person holding you accountable to those results on a daily basis is you. So your plan becomes a baseline for monitoring your progress. If your prototype was to be complete by February 1, and it gets done early-on January 10, for example-you can ask yourself why. Was there an unexpected breakthrough? Did someone put in a heroic effort? Or did you just overestimate? What you learn will help you do an even better job next time.

But even more than a tool for after-the-fact learning, a plan is how you drive the future. When you write, “We expect 100 customers by the end of year one,” it’s not a passive prediction-you don’t just wait for the customers to show up. It becomes your sales force’s goal. The plan lays out targets in all major areas: sales, expense items, hiring positions and financing goals. Once laid out, the targets become performance goals.

And of course, a well-written plan is great for attracting talent. When a prospect asks to understand your business, you can hand them a plan that gives them an entire overview. Their reactions tell you something about how quickly and thoroughly they can think through your business’s key issues. Plus, the written record of your goals coupled with a track record of delivering against those goals sends a message loud and clear: You understand your business and can deliver the results you promise. Great employees will respond to that message-as will banks and investors the next time you need to raise money.

So viewing your plan as a fund-raising tool is just the beginning of the story. You’ll use the plan for so much more-for managing yourself, for operating the business and for recruiting. Before deciding to skip your planning phase, consider all the implications and what they mean for your future success.

Stever Robbins is a venture coach, helping entrepreneurs and early-stage companies develop the attitudes, skills and capabilities needed to succeed. He brings to bear skills as an entrepreneur, teacher and technologist in helping others create successful ventures.

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Finance Your Franchise

This is it. You’re ready to begin your franchise dream. Only one thing is left: Finding the money you need.
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You’ve read the literature, done your due diligence, considered the statistics on success, and know a franchise is the way you want to get into business.

But before you sign on the dotted line, answer this question first: Where will you get the money to finance the franchise, royalty fees, inventory and working capital?

The first thing you want to do before approaching any lender is determine what your net worth is. To do this, use a personal balance sheet to list both your assets (what you own) and liabilities (what you owe). Under assets, list all your holdings–cash on hand, checking accounts, savings accounts, real estate (current market value), automobiles (whether paid off or not), bonds, securities, insurance cash values and other assets–then total them up.

The second part of the balance sheet is liabilities. Follow the same steps. List your current bills, all your charges, your home mortgage, auto loans, finance company loans and so on. Subtract your liabilities from your assets. Once you’ve worked up this sheet, take a good look at your credit rating. There are three common ingredients that all potential lenders look for in a credit rating: stability, income and track record.

Most lenders are interested in how long you’ve been at a certain job or lived in the same location, and whether you have a record of finishing what you start. If your past record doesn’t show a history of stability, then be prepared with good explanations. Not only is the amount of income you earn important but so is your ability to live within that income. Some people earn $100,000 a year and still can’t pay their debts, while others budget nicely on $20,000 a year.

Most lending institutions look at your income and the way you live within that income for one very good reason. If you can’t manage personal finances, the odds against you being able to manage your business finances are very good.

The third element lenders look for is your track record–how successful you’ve been in paying off past obligations. If you have a record of delinquent payments, repossessions and so on, you should get these squared away before asking for a loan.

Most lenders will contact a credit bureau to look at your credit file. We suggest you do the same thing before you try to borrow. Under the law, credit bureaus are required to give you all the information they have on file about your credit history. Once you have this tool, you should correct any wrong information or at least make sure your side of the story is on record. For instance, a 90-day delinquency would look bad, but if that 90-day delinquency was caused by being laid off or by illness, then that should be taken into consideration.

Business Plan

After you’ve determined your net worth and your credit rating, the final step to take before approaching lenders is putting together your business plan.

A well-thought-out business plan can make the difference between having your loan application accepted or rejected. A complete business plan should always include an intimate, technical study of the business you plan to go into; accurate pro formas, projections and cost analyses; estimates of working capital; an indication of your “people skills”; and a suitable marketing plan. It should also include certified statements of your net worth and several credit references.

Financing From the Franchisor

Traditionally, the first place franchisees turn for financing is the franchisor. Almost all U.S. franchisors provide debt financing only. Some carry the entire loan or a fraction thereof through their own finance company. We found fractions of 15 percent, 20 percent and 25 percent, all the way up to 75 percent of the total debt burden. The franchisors we talked to emphasized that these figures are simply guidelines and not hard and fast limits.

In addition, the loans made by the franchisor can be structured a number of ways. Some offer loans based on simple interest, no principal, and a balloon payment that’s due five or 10 years down the road. Others offer loans with no payment due until after the first year.

Instead of financing the entire start-up cost, franchisors may offer financing for portions of the entire cost. They may have financing plans for equipment, the franchise fee, operational costs or any combination thereof.

In addition to financing a portion of the start-up cost, the franchisor usually has made arrangements with leasing companies to lease the franchisee the equipment necessary to run the franchise. This can be a significant part of the financing, since equipment often makes up between 25 and 75 percent of a franchise’s total start-up costs.

If the franchise you’re considering doesn’t offer equipment leasing, look into nonfranchise, nonbank companies that specialize in equipment leasing for franchises. These types of financing companies will often provide asset-based lending to finance franchisees’ furniture, equipment, signs and fixtures, and will allow franchisees to purchase the equipment at the end of the lease. Keep in mind that you may lose some tax advantages under the current law if you lease that equipment.

Remember that a business is franchised for two reasons: to expand the business and to raise capital. So if you have a reasonably good credit record and pass all the financial requirements, most franchisors will bend over backwards to get you on the team. The help that franchisors provide to help you get financing usually includes assistance with business plans and introductions to lending sources. In many cases, franchisors serve as guarantors of loans you take out.

Other Sources of Financing

After you’ve determined the extent of financing available from the franchisor, make a working list of all other available sources of capital. Most sharp operators use the following sequence of contacts: friends and relatives, home mortgages, veterans’ loans, bank loans, SBA loans and finance companies.

Often, banks that aren’t willing to work with you based on your financial profile become more amenable if you suggest working with an SBA loan guarantee; these loans are guaranteed up to 90 percent by the SBA. Small businesses simply submit a loan application to the lender for initial review, and if the lender finds the application acceptable, it forwards the application and its credit analysis to the nearest SBA office. After SBA approval, the lender closes the loan and disburses the funds; the borrower makes loan payments to the lender.

Some franchisors report being approached by financial brokers–historically more interested in big deals–to put together large pools of money using SBA and private funds. These funds would be available to franchisees through the franchisors like a trust fund. Groups of smaller banks with funds to invest would contribute to the fund from all over the country.

Other options would be to take out a home-equity line of credit or a second mortgage on your home. Be careful when utilizing this type of financing, however. The home-equity line of credit and a second mortgage are secured by your home. If you can’t repay the amount you finance using this source, you risk losing your home.

You can also use assets such as stocks, bonds, and mutual funds to secure a loan as long as they’re not part of a qualified plan like an IRA profit-sharing plan. Also, if you are over age 59 and have a lot of money tied up in an IRA, you could use it for part of your financing requirements. Although you’ll have to pay taxes on the amount used, not to mention suffer the loss of income from interest, it can be a good financing tool.

If you are under age 59 and your IRA is one of your largest assets, you still may be able to take advantage of this avenue without accruing the 10-percent penalty associated with early withdrawal. By taking Substantial Equal Periodic Payments spread over a minimum of five years, based on your life expectancy, and a set of annuity tables published by the IRS, you can eliminate the 10-percent penalty, although the money is still taxable.

Tips to Consider

There are infinite sources of financing available to help you launch the franchise of your dreams. However, operating a franchise with no reserves and blinding yourself to unexpected business problems can lead to disaster. A good rule to remember: Never invest more than 75 percent of your cash reserves. If you have $10,000, invest $7,500. If you have $25,000, invest $18,750.

More important, remember that the price of a franchise doesn’t always reflect the actual cost of the business itself. Additional costs can include down payments on the land, building, equipment, fixtures and signs, and can cover inventory, leasehold improvements, training, opening promotional costs, administrative costs and even sales commissions.

Be sure you understand the requirements of your cash investment. You will need a “pillow” of working capital to properly guide the business through its ups and downs. If you do your homework thoroughly, and remember that financing a business is the most important sale you’ll ever make, then you’ll be head and shoulders above the competition.

15 Fast Franchise Financing Tips

1. Talk to your franchisor before searching for outside financing; get approved or pre-qualified.

2. The most common source of start-up capital is friends and family. Use them.

3. Seek out lenders that understand not just small business but franchising as well.

4. Be totally honest and upfront with lenders. Hide nothing. Be prepared to explain everything.

5. Neatness counts. Fill out your credit and loan applications clearly. Typed is better.

6. Don’t weigh down your loan application with attached documents.

7. Don’t exhaust your liquidity by paying off outstanding debts before filing a loan application. Lenders want you to have capital available.

8. If you lack liquidity, find a partner with money.

9. Consider equipment leasing to conserve start-up capital and improve the appearance of your balance sheet.

10. Keep debts and expenses to a minimum. Many business owners take on too much debt, forgetting that cash flow must pay that debt.

11. Consider buying used equipment, furniture, vehicles, etc.

12. Let your fingers do the walking on the Internet before wasting time, energy, gas and phone calls. You’ll find useful information. Some sites even allow you to file loan applications online.

13. Don’t overlook angel investors and venture capitalists.

14. Avoid dipping into your retirement money or your kids’ college funds. Any startup-even a franchise-is a risk.

15. Don’t give up.

“Life is what happens when you’re busy making other plans.” …and sometimes things get out of control. A bad credit rating can be gut-wrenching and humiliating as well as just plain bad news. Contact at your earliest convenience. Whether you’ve had a bankruptcy or your credit is only slightly bruised, you can obtain financing.

A Simple Plan For Investigating Companies

The Ultimate Guide To Franchise-Like Home Business

Are you one of the many moms who are at home all day? Even if you are not, chances are, you would prefer to work at home. If you would like to make money from a business while staying in the comforts of your own home, then this article is meant for you. There is also the option of learning from the likes of 8 Figure Dream Lifestyle – Coach Brian Kaplan so you can be a step closer to your goals.
But is 8 Figure Dream Lifestyle a scam? You should turn to 8 Figure Dream Lifestyle reviews to determine this. Take a moment though to see if these are 8 Figure Dream Lifestyle real reviews and not paid advertisements.

Many people find the logistics of writing a business plan daunting. Aside from this daunting aspect of writing a business plan, you must also consider the needs of other departments such as legal, accounting, human resources, sales, marketing and customer service. But don’t worry because we have good news for you.

The good news is that for people who want to work from home, there are businesses that you can run straight out of your living room. These businesses are franchise-like home business and they will provide you with the exact blueprint so you can meet your business goals.

First of all, what is a franchise? A franchise is, to put it simply, a business in a box. In other words, it is a business model that other people can readily duplicate. The simplicity of duplicating a franchise is what makes it very attractive. You may consider it as something where the difficult portion of planning has already been done for you.
To start working with a franchise, you basically need to pay to get a thorough manual and other things so you can begin to run the business. You will find many franchises that are from well-known brand names. The upside of these is that you will not have to shell out money for marketing.

Even though you will not have as much freedom in terms of running the business, the upside is that you will be working with a business model that has already proven to be effective. You won’t have to worry about testing certain ideas only to find out that they have failed. These mistakes are also usually very expensive. The cash that you initially need to shell out is nothing compared to the money you save avoiding expensive mistakes and, furthermore, you need to consider the money you can earn.

If you work with a franchise like 8 Figure Dream Lifestyle, you can be one step closer to your goal of being successful. A franchise-like home business can not only help you earn money, it can also give you more time doing the things you love.

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The Beginner’s Guide to Services

Why People Use Online Calculators.

A device that is small called a calculator are used for accurate calculation. Human beings are helped by the calculators because it reduces a headache to someone. The people and the society are helped by the calculators that play a major role. All over the country one can get the online calculators that are necessary to the people because it makes work easy.

Online calculators are easy to find and simple to use them. Online calculators are preferred by people because of the advantages that it has. People do not worry because the compound interest formula is found in the online calculators.

Any sum is done by the online calculators that help people get the accurate results. The individuals who use the online calculators do not waste their time while doing the calculations. One needs to be keen while calculating compound interest because of the different numbers but the online calculators help people while doing the sums.

People can access the online calculators from where they are at their comfort. The different designs and shapes of the online calculators make people love the service that it provides.

People have easy access to the online calculators because they are attractive and are labeled well. The currency sums are done by the online calculators that help in simplifying work.

The update of the online calculators helps people get what they want in a fast way. Many people can use the online calculator at the same time without having any effect. Research shows that the methods that are in the online calculators help people use it and can be accessed at any time and their accuracy. People respond to their goals and objectives with the help of online calculators that are used in different places at different times.

The stress of people is reduced by the online calculator that helps in hard sums. The affordability of the online calculator helps people do not worry.

People trust the online calculators because one can use them as many times as he or she wants. People can access the online calculators any place and at any time. The fast and accurate online calculators help people enjoy them. The formulas that one may need are found in the online calculators that make people do not worry.

People benefit because the online calculators have no negative effect. Online calculators have a compound interest calculator that helps people find the interest that they want.

Online calculators have the compounding interest calculator that helps in solving the issues that people may have. Numbers that can confuse someone are found in the compound growth calculator, but the online calculator helps in getting the accurate results.

The 4 Most Unanswered Questions about Businesses

Guidelines in Selecting an Accounting Career

When you are choosing a career, you should choose one that you have a passion for it in life. You should think of doing accounting courses for it will prepare with the best skills in the business world. For this to become a reality, you have to have concentration, time and commitment. The institution you will choose will also matter a lot. After confirming that this is the vocation you need, you have to put a few contemplations as clarified here.

You should start by determining the right place that provides the courses. You may join a foundation close to your place or take the online classes. If you choose to have online courses, make sure that you understand that the college will allow this option. For the best training here, it is advisable to contact the state accounting classes online. The greatest thing about the thought is that one can benefit from the lessons from anyplace. Remember to pick one that is highly known in many working areas. Also, be certain that is known in different countries in the world.

It is also great to understand if the institution will train you using the high-quality skills. Here, you should take time and read the comments of other individuals taking the course to check whether you will benefit from them or not. Here you have to identify the examination organizations selected by the institution.Remember that some examination bodies are not recognized in some places, and it will be for nothing if you take this kind. If you need to end up noticeably awesome in this vocation, you should take a look at the online exam prepare and courses.

It is also wise to learn the type of accounting to take.This will depend on your state and the requirements for many companies. This will rely upon your state and the necessities in many organizations. For instance, you may choose CPA or ACCA bookkeeping courses. One may go for the ACCA or CPA lessons.If you opt to do CPA, make sure that you have CPA courses for review and understand everything about this course.It is also here that you might consider looking more on the time that you have for the course. In case you are still working and requires having accounting continuing education program, it is essential to know the right time to take on with the classes. It is dependably something important for you to pick an adaptable time that will not meddle with your present work. Choosing this route will ensure you achieve your goals in life.

If You Read One Article About Experts, Read This One

What you need to know before hiring Financial Advisors.

When hiring a financial provider for your business, you need to be very cautious. It is worthwhile being disciplined with whatever steps or decisions you make when it comes to the savings you have been making for your entire life. Hiring professional advisors means that you have them to work for you for a very long time and not just for a year or less. It would just be a waste of time and cash hiring one advisor after the other when you hire the wrong professionals who do not suit your business. Not all the advisor who appears at the yellow pages will have all the other qualities of the best advisor, and that is why you need to keep looking. The following guides should be enough for you to land with an advisor who suits your job.

You should never hire any professionals who do not show their certificates on their portfolios. The certificates are given to students who are successful in their careers, and that is why you need to check the grades the advisor have been receiving. You need to check the license that the advisor has and if it is updated. Having a license cover means that the advisor is offering the services legally. You would not have a chance to locate any unlicensed professional in case anything goes wrong with the planning you receive with him/her because you have no traces.

The experience of the advisor in the planning industry is another thing you need to consider. You might feel uneasy to allow an advisor who has only one year of experience in this field. Also, you do not wish to hire someone who has just had his/her graduation because he/she does not have the skills required in this field. A reputable expert will have the right detailed report of the services he/she has been offering to various businesses and how successful they have been. You should never settle for an advisor who has giving misleading advice to businesses.

Some business persons would stress themselves out making some plans for their business while that is not necessary. Let the professionals do what they are trained to do best. By hiring the advisor, you will be certain that you have received the best of the advice for your business. Again, if the professionals are favorable, there would be no reason why they are trained. They make businesses work effectively because of the professional ideas they bring to your business. When dealing with money, you do not have to do some guessing that some techniques will be successful.

Understanding Resources

Different Means That One Can Use to Choose a Financial Advisor

People who offer rendering and financial services guidance to the customer bearing in mind the various needs of the customers are referred to as financial advisors. Licenses and related skills should be observed for an individual to carry out monetary advice to the customers. Through the utilization of the licenses and the skills, advisor are in a position to give the right finance and products required by the clients. Before hiring a financial advisor, the client should have a well-compiled list of the most peculiar thing that one needs to be assisted. The following are the various methods of getting the proper financial advisor today.

Depending on the various needs, the individual should have the right preference of the advisor to satisfy the demands require. There are different categories of the financial advisor, and they include the following: registered representatives, financial planners, financial advisors and money managers. Therefore, one should consider the above advisor depending on their various characteristics that suit the needs.

it ‘s nice to have the preference of the most qualified person. The individual should focus more on the right qualification that is portrayed by the particular counsel. Consider the expertise with retirement plans that will benefit one during the day of retire. This will ensure better financial plans are taken into consideration which will ensure a better life in the future.

One should consider holding numerous talks to the different advisor to get the best out of them. Once the data has been achieved, the client should compare and come up with the best personnel who suits the preferred tasks.

However, one can decide to source the qualification of the advisor from the website. A lot of information is displayed on the website that can be used to range various financial advisor. It is quite easy to get the most anticipated financial advisor by comparing the various history of the staff from the internet services.

Meeting in person can also be a factor to getting the best team. One can decide to conduct interrogation session that can provide the general overview of the various thing a single personnel can undertake. One the interview is over; one can make the multiple comparisons of the answer given by the relevant staff.

References can be checked to clarify the validity of the information given. Also people can be consulted to give the various experiences with different financial advisors. It is quite important to ask about the period one has been in the similar job and how the individual performed it. It is thus important to have all the relevant information before choosing the advisor.

What Do You Know About Money

Several Tips To Assist You Find The Financial Advisor Of Your Dreams

The investment field is nowadays challenging, and that is why you need to make rational decisions about your money. There are considerations such as access to finances, a financial strategy and also investment products so that your investment can be successful. Another key aspect that is probably important for an investor is to manage their emotions well so that there is no chance of the money being exposed to volatility. An investor can seek the services of an expert who can provide advice on the management of their finances. The people around you can benefit from the services that are provided by a financial professional because formulation financial decisions is not easy. The mode of clients having a financial advisor has been around for a long time. A financial advisor is a skilled professional who delivers specialized financial services to businesses, people and also governments.

Financial services provided by an expert are such as pension planning, estate planning, retirement, insurance sales, asset allocation and portfolio evaluation. For an investor, they each have their needs, and that is where a financial advisor comes in to solve what they want. You will still control all your assets but the advisor has to know of their existence. The legal framework is structured in such a way that the professionals in the financial industry act for the good interest of their customers at all times. The kinds of investment amenities that are provided are based around aspects such as financial history, risk tolerance and the income requirements. First be conversant with the different sources of financial advisors that are present.

The reason, why financial advisors are different, is because of the variance in educational background, experience, compensation methods and also professional focus. Tax, estate and financial planning are some of the other disciplines that could be combined by a financial advisor who not only provides advice. A financial advisor must also be a certified individual. A trait that you must look out for in a financial advisor is the ability of one to listen keenly to what you have to say. A financial advisor will volunteer to answer some vital questions that you skipped to ask. A financial strategy will be formulated according to the needs you would have explained to the advisor.

You certainly, have financial goals, and that is where the emphasis should be so that you meet those goals. When it comes to fees for the financial advisor, it is good to select an expert who will accept the fee-only mode. When you have selected an advisor, make sure that communication is constant so that any changes that are made, he or she is aware of them. You must have an open relationship with the advisor so that any issues are tackled.